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Silver. —The Sub-Commission, on the recommendation of the Sub-Committee on Silver, adopted the following resolution, which was based on a draft submitted by the United States delegation " Be it resolved to recommend to all the Governments parties to this Conference, — " (a) That an agreement be sought between the chief silver-producing countries and those countries which are the largest holders or users of silver, with a view to mitigating fluctuations in the price of silver ; and that the other nations not parties to such agreement should refrain from measures which could appreciably affect the silver market. " (b) That Governments parties to this Conference shall refrain from new legislative measures which would involve further debasement of their silver coinage below a fineness of 800/1000. " (c) That they shall substitute silver coins for low-value paper currency in so far as the budgetary and local conditions of each country will permit. " (d) That all of the provisions of this resolution are subject to the following exceptions and limitations : — " The requirements of such provisions shall lapse on April Ist, 1934, if the agreement recommended in paragraph (a) does not come into force by that date, and in no case shall extend beyond January Ist, 1938. " Governments may take any action relative to their silver coinage that they may deem necessary to prevent the flight or destruction of their silver coinage by reason of a rise in the bullion price of the silver content of their coin above the nominal or parity value of such silver coin." This resolution in no way conflicts with the measures the Government has now in hand for the issue of a special silver coinage for New Zealand. The present British silver currency in use is of a fineness below that mentioned in the resolution, but it is not intended to bring down any legislation for further debasement of our currency to a fineness lower than that of the British coinage which is legal tender at present. Monetary Reserves. —After consideration of the matter of monetary reserves by the Sub-Committee on Technical Monetary problems, the following resolutions were adopted by the Sub-Commission : — " (c) That under modern conditions monetary gold is required not for internal circulation, but as a reserve against Central Bank liabilities, and primarily to meet external demands for payments caused by some disequilibrium on the foreign account. It is consequently undesirable to put gold coins or gold certificates into internal circulation. " (d) That in order to improve the working of a future gold standard greater elasticity should be given to Central-bank legal-cover provisions ; for instance, in so far as the system of percentage gold cover is applied a minimum ratio of not more than 25 per cent, should be considered as sufficient; similar elasticity should be achieved by appropriate measures where other systems are applied. However, such changes must not be taken as an excuse for unduly building up a larger superstructure of notes and credits ; in other words, the effect of this resolution should be to increase the free reserve of central banks, and thereby to strengthen their position." Central Banks.—After full consideration of questions of central banking by the Sub-Committee, the following resolutions were adopted by the Sub-Commission : — " 11. The Conference considers it to be essential, in order to provide an international gold standard with the necessary machanism for satisfactory working, that independent central banks, with the requisite powers and freedom to carry out an appropriate currency and credit policy, should be created in such developed countries as have not at present an adequate central banking institution. " 111. The Conference wish to reaffirm the declarations of previous Conferences with regard to the great utility of close and continuous co-operation between central banks. The Bank for International Settlements should play an increasingly important part not only by improving contact, but also as an instrument for common action. " IY. The Sub-Committee has taken note of the suggestions of the Roumanian delegation with a view to securing the adaptation of the central banks of certain agricultural countries to the special economic conditions of these countries and of the views expressed in the discussion thereof. The Sub-Committee feels that the local conditions in each country will to a very large extent determine the solutions to be adopted in this matter and suggests that if any countries desire advice on these questions in view of their technical character they might appropriately be considered by the international organizations specially competent to advise on these matters." Central Bank Policy.—The Sub-Commission held its final meeting on Monetary Problems on the 20th July. The following resolution was communicated to it:— " The Sub-Committee approves the annexed statement of general principles of central banks monetary policy which was laid before it: — " (1) The proper functioning of the gold standard requires in the first place the adoption by each individual central bank of a policy designed to maintain a fundamental equilibrium in the balance of payments of its country. Gold movements which reflect a lack of such an equilibrium constitute, therefore, an essential factor in determining central-bank policy. " (2) Gold movements so far as they seem to be of a more permanent character should normally not be prevented from making their influence felt both in the country losing gold and in the country receiving gold.

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